Custom, Excise & Service Tax Tribunal
M/S Sri Rayalseema Green Steloy Ltd vs Cce, Tirupati on 17 June, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench SMB
Court I
Appeal No. E/49 & 103/2008
(Arising out of Order-in-Appeal No. 30/2007 (T) CE dt. 24.10.2007
passed by Commissioner (Appeals), Guntur )
For approval and signature:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
M/s Sri Rayalseema Green Steloy Ltd.,
..Appellant(s)
Vs.
CCE, Tirupati
And
..Respondent(s)
CCE, Tirupati ..Appellant(s) Vs. M/s Sri Rayalseema Green Steloy Ltd., ..Respondent(s) Appearance Sh. P. Dwarakanath, Consultant and Sh. B. Venugopal, Advocate for the Assessee.
Sh. S. Reddy, Assistant Commissioner (AR) for the Revenue.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 17.06.2016 Date of Decision: 17.06.2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The above appeals emanate from the same Order-in-Appeal and therefore were heard together and are disposed by this common order.
2. The appellants are engaged in manufacture of sponge Iron and are availing the facility of CENVAT Credit on inputs and capital goods. Three show cause notices were issued alleging irregular availment of credit on M.S. Channels, M.S. Angles, H.R. Coils, M.S. Beam, T.M.T. Bars etc., as inputs. After adjudication a common Order-in-Original was passed confirming the demand, interest and penalty. The appellant preferred appeal before the Commissioner (Appeals). The Commissioner (Appeals) vide the order impugned herein, allowed credit of Rs. 31,82,365/- and disallowed an amount of Rs. 98,201/-. Aggrieved by the disallowance of Rs. 98,201 and confirmation of this demand, interest and penalty the assessee is in appeal before me. Aggrieved by the order allowing credit of Rs. 31,22,807/- and educational cess of Rs. 58,558/- the Revenue is in appeal.
3. I have heard both sides and perused the records.
4. The period involved is from September, 2004 to May, 2006. The case of Revenue is that the MS items were used for construction of sheds/support structures in which the capital goods are placed. As these became immovable property, they are not capital goods and credit is not admissible. The contention of assessee is that the subject items (M.S. Angles, Channels, Beams, Joists, Flats, H.R. Coils, H.R. Strips, Plates, TMT Bars) were used for structural support to various machinery and without such support the machines cannot be used or put to function effectively. On perusal of records, I find that appellants have given clear details and description of the use of the subject items. They were used for crusher house, EOT crane and steel melting shed, electro static precipitator, ground hopper, stock bin / intermediate bin, product house, water storage tank, stock house, transfer house etc. The period involved being prior to 07.07.2009 the subject items used for fabrication of capital goods to the tune of Rs. 31,22,807 and educational cess of Rs. 58,558/- has been rightly allowed by the Commissioner (Appeals). Therefore, I hold that the appeal filed by Revenue is devoid of merits.
5. The assessee challenges the disallowance of credit availed on TMT bars. Both the authorities below have observed that these are used in civil construction and there is no evidence adduced by assessee to establish the actual use of TMT bars. The learned counsel appearing for assessee was fair enough to concede that the details of the use of TMT bar has not been produced. On such score, I endorse the view of the Commissioner (Appeals) that the credit of Rs. 98,201/- availed on TMT bars is not admissible. The learned counsel pointed out that during the relevant period, the issue whether credit is admissible on MS items used for fabrication of capital goods, structural support, shed etc was contentious. In Vandana Global Ltd., Case [2010-TIOL-624 CESTAT-Del-LB] it was held that credit is not admissible if the capital goods are attached to earth. It was also held that the explanation to Rule 2 (k) of CCR, 2004 is retrospective in application. In Mundra Ports & SEZ Ltd., [2015-TIOL-1288-HC AHM-ST] it was held that the explanation added to Rule 2 (k) is only prospective in nature.
6. The appellant has disclosed the credit availed in their ER-1 returns. As there were several decisions in favor of assessee during the material period, they were under bonafide belief that credit is admissible. The issue being interpretational and contentious, I hold that the penalty imposed is unjustified. In view thereof, I set aside the same. The appeal No. 49/2008 is partly allowed by setting aside the penalty without disturbing the confirmation of demand and interest. The appeal No. 103/2008 filed by Revenue is dismissed.
(Operative part of this order was pronounced in court on conclusion of the hearing) (SULEKHA BEEVI C.S.) MEMBER(JUDICIAL) Jaya.
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